Sunday, July 13, 2008

The Federal Government announced changes today on government backed mortgages - these changes will directly impact buyers who require 100% financing and the extended 40 year amortization.

Highlights:

40 year amortizations will no longer be allowed (for CMHC insured mortgages);

Minimum 5% down payment will be required....(CMHC will no longer be able to insure 100% financing);

Stricter documentation requirements:

Higher minimum credit bureau score;

New changes effective October 15, 2008.

This announcement was made today - so there will likely be more updates and clarifications made in the near future - I'll keep you posted.

Also, these changes are related to government backed mortgages (insured through CMHC). Two other mortgage insurers currently offer 100% financing and 40 year amortizations. At this time, they have not communicated any policy changes.